E-commerce companies raise $7 billion in 2018
BENGALURU : The e-commerce and consumer Internet companies in the country raised over $7 billion in private equity and venture capital (PE/VC) from around 212 deals in 2018, a report from leading advisory company Ernst & Young (EY) revealed. Of the total amount, $5.9 billion was invested as early-stage capital and $1.3 billion as expansion/growth capital.The report, E-commerce and Consumer Internet Sector – India Trendbook 2019, highlights that majority of the funding was towards building the supply chain, expanding to new segments, global expansion, acquisition or consolidation, and bringing innovative product offerings to the market.
Of the various e-commerce and consumer Internet sectors, Hyperlocal segment attracted the maximum PE/VC capital, followed by travel and hospitality, stated the reportThe significant capital inflow in the sector has made India one of the most exciting destinations to invest, said Ankur Pahwa, partner and national leader (E-commerce and consumer Internet), EY India. “This massive opportunity has been unlocked by the increasing number of digital transactions, digital literacy and rise of rural e-commerce and growing use of vernacular content,” he said.
Start-ups like OYO, Swiggy, Byjus, PayTm Mall, Pine Labs, Zomato, Udaan, PolicyBazaar and CureFit have collectively raised a lion’s share, amounting to approximately $4.6 billion. The major deals in 2018 included Walmart’s acquisition of Flipkart for $16 billion, Alibaba’s investment in BigBasket and PayTm, Tencent’s investment in Dream11, and Naspers’ investment in Byjus and Swiggy.
The report states that the trends in terms of consolidation will continue in 2019. Companies will need to consolidate to add more services and segments to expand the level of engagement with customers and leverage emerging technologies such as AI, voice/image enabled search, Blockchain, AR/VR and IoT, it said.